Inflation hits poor Nairobi families hardest in a year

Lower-income families in Nairobi were hardest-hit by the rising cost of living in the past year, with inflation for this segment remaining above the national average for 11 straight months.

Official data shows that the average inflation for the low-income homes in Nairobi was at 6.08 percent in May in contrast with that of middle income (2.68 percent) and upper income (2.67 percent) residing in the city.

The figure, though a drop from a peak of 8.36 percent in February, is above the national average of 5.33 percent for the past 11 months. The last time the inflation rate of Nairobi’s poor homes was below that of the rest of households in Kenya was in July last year when it averaged 6.13 percent. This was in contrast with the national average of 6.27 percent.

The lower inflation enjoyed by middle and upper-income Nairobi homes and the rest of the urban areas in Kenya helped lower the May inflation to a 14-month low of 4.61 percent, partially masking the high cost of living facing poor homes.

The difference in inflation levels among Nairobi’s income segments, the Kenya National Bureau of Statistics (KNBS) disclosed, is linked to the different consumption habits.

While the rich spend a larger share of their budget on transport, the middle class use their money on utilities and rent while food takes the bulk of the poor’s budget.

Data for last month shows a basket of goods classified as food and non-alcoholic beverages had seen the highest year-on-year rise (8.15 percent) when compared with the other baskets used to measure inflation.

KNBS’ second survey on the impact of Covid-19 on households showed that 78.8 percent of respondents reported an increase in food prices last month, further hitting low income households.

The survey further showed 61.9 percent of respondents were out of work due to coronavirus-related challenges, up from 49.9 percent in May.

KNBS classifies the Nairobi lower income group as those spending up to Sh46,355 per month and this makes up about 70.89 percent of the households.

Nairobi middle-income group captures those spending between Sh46,356 and Sh184,394 per month while upper class is for spenders of above Sh184,394.

Nairobi’s middle and upper class make up 25.58 percent and 3.53 percent of the households, KNBS data shows.